August 6, 2021

Macro Series

Analysis – What to infer from inflation outliers

BY John Llewellyn, Saul Eslake

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( < 1 min)
  • Price shocks, or ‘outliers,’ raise general inflation if they ‘infect’ core prices and wages
  • This happened in the 1970s and early 1980s, on the occasions of the two big oil shocks
  • However, it has not happened (in ‘advanced’ economies) since the mid-1990s
  • Current conditions do not seem ripe for a 1970s-type response to current outliers
Macro-series-Current-inflation-What-to-infer-from-outliers-5-August-2021

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